1031 DST Investment Advisors
Unlike our competitors, 1031 DST Investment Advisors understand the struggles you face in choosing the right investment for your business goal. Solely based on your commercial needs, we offer a holistic approach to assist you in navigating through 1031 Exchanges and Delaware Statutory Trusts (DST). Crafting a personal plan to cater to your entire financial life and your retirement needs are our speciality. After serving our valuable clients in DC over the years, we have built numerous successful cases with many local DST investors and beyond.
Picking your next successful DST investment is easier than you think
It is really simple and straightforward to create a DST. It must be an association established by a governing instrument. A governing instrument is absolutely vital for a DST, and it is the very reason why DST excels over the other investment tools. A DST governing instrument can be any written instrument with few limitations on its content. However, it may need to include some general requirements about beneficial owners or a trustee at least. Normally, a governing instrument is your trust agreement.
Since DST possesses a separate legal entity, it has its own legal capacity to carry on any lawful business, subject to the limitations stipulated in the trust agreement. Neither the trustee nor the beneficial owners are personally liable for the obligations borne out of the DST, as long as they act within their designated capacities. The beneficial owners can delineate such capacities in the trust agreement. It is important to remember that the trust agreement (also known as the governing instrument) serves as a mini-constitution for the trust.
For someone who is not financially hefty to acquire an upscale property solely on his own, DST provides an excellent choice for him to declare fractional ownership of it. DST offers a solution of fractional ownership to allow multiple investors to gain possession of properties. Such fractional ownership entitles the investors to receive monthly interest upon the profit generated from the properties. On the other hand, investors’ proceeds from the investment real estate sale do not have to invest fully in one DST property. It would be wise to distribute it across multiple DST properties.
Real property only
The properties under the 1031 Exchange in the past included aircraft, automobiles, heavy equipment, and mineral rights. However, after December 31, 2017, only buying or selling real properties are qualified for the purpose of the 1031 Exchange. This alteration was manifested by the language assertion directly in the Internal Revenue Code. Such a change was considered substantial. But since the majority of the 1031 Exchange was already dominated by commercial and investment real estate, it did not impact the market very much in practice.
Substantive qualifications of property
Under 1031 Exchange, the properties have to be “the same nature or character, even if they differ in grade or quality.” For example, swapping a rental property with a gym space would be allowed. Properties that involve stocks, bonds, notes, securities, and interest in partnerships are excluded. Although it does not require the investor to be a US resident, both properties for the Exchange must be located in the United States. However, keep in mind that the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) will be applicable for a foreign investor. It can trump some benefits of using the 1031 Exchange. The investor’s proceeds from the sale of the original property might be partially taken by the tax obligations derived from FIRPTA.
Procedural qualifications of property
Any property received by the taxpayer shall not be treated as like-kind property if such property is not identified as like-kind property within 45 days since the date in which the taxpayer transfers the property relinquished in the exchange. And the identified property is received outside the 180-day window starting on the date which the taxpayer transfers the property relinquished in the exchange. It means that the identified property or properties must be purchased within 180 days for the purpose of the 1031 Exchange.
Professional advice that you are looking for.
We recognize that every client is unique. Hence we do not believe in a streamlined template solution that can apply to all. We spend an extraordinary amount of time with every client to ensure your needs and problems are heard and addressed fully. Our wealth management formula addresses the top five concerns most important to affluent families: Investment Consulting, Wealth Enhancement, Wealth Transfer, Wealth Protection, and Charitable Giving. Our advisors are fully licensed and widely recognized in the fields they practice. They are ready to work tirelessly and offer a matchless strategic plan only for you.